Biotech M&A gossip: Amgen buyout of Onyx could happen soon

Aug 8, 2013 10:45am

Amgen's ($AMGN) highly publicized pursuit of Onyx Pharmaceuticals ($ONXX) could end in less than a week, as sources tell Reuters that the two companies could strike an acquisition agreement within days.

Thousand Oaks, CA-based Amgen reportedly sweetened its offer to Onyx this week, raising its bid to $130 per share after the board of Onyx spurned Amgen's $120-per-share overture in late June. Shares of South San Francisco-based Onyx have jumped more than 50% since the buyout buzz began a bit more than a month ago, and the news service's sources say that other would-be bidders have been priced out of the chase.

Onyx CEO Tony Coles

Given the lack of other offers, Onyx CEO Tony Coles could warm to Amgen. Onyx's sales process launched after the initial Amgen bid is said to have attracted interest from other companies, rumored to include AstraZeneca ($AZN), with needs to fill holes in its drug pipelines. Onyx markets the liver cancer drug Nexavar with Bayer, but the crown jewel of the company could be the multiple myeloma drug Kyprolis, which analysts project to exceed sales of $1 billion by 2016, the Wall Street Journal reported.

Analysts have sounded supportive of a buyout of Onyx at around $130 per share, which would value the company at almost $9.5 billion. In the deal, Amgen would gain some growth products to compensate for the patent cliff the company faces in the coming years as products such as Neulasta for chemo patients lose patent exclusivity in 2015 and beyond.

Yet a buyout of $130 to $135 per share could disappoint some of the speculators who bit on bullish theories that Onyx could be worth $150 per share or more. Shares have already dropped from the $136 price hit in the first half of July to around $128 per share after no one other than Amgen came up with actual buyout offers.

Onyx is expected to announce quarterly earnings after the market closes, providing an update on sales performance on closely watched Kyprolis.

- check out Reuters' article
- and the item from WSJ
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